Bitcoin
Already, at the most naïve level of its acceptation, ‘Bitcoin’ is a word that refers to at least three things. Of these, the most elementary – although today least invoked as a definition of the term – is a succinct, technical paper, in whose catalytic code everything was, in a certain sense, already implicit. There is nothing obvious about this terminological development. To speak of the ‘critique of pure reason’ is first of all to name a book, even though (no less than with Bitcoin) it is the book’s ‘object’ that is being named. Critique of pure reason (the ‘thing’) is in this case a delayed signification, despite the fact the title says nothing else. In the case of Bitcoin, this system of acceptations is conspicuously inverted. ‘Bitcoin’ is not understood primarily as a paper,* perhaps because it is not primarily an argument. Its nexus of persuasion has migrated outward, in close association with the meaning of code. Critique undergoes accelerating automation. — Nick Land n4-18 Bitcoin Bitcoin is a program that works as money on the Internet, but without paying banks and creditcard companies. Its inventor—Satoshi Nakamoto—referred to it as "new electronic cash system that’s fully peer-to-peer, with no trusted third party." (See: The bitcoin paper.) Bitcoin is an articulation of currency. Bitcoin is money. Money is a concept to measure value. It is a token for value. It shows value through token. If you hold a 50 cent coin that is a token for a measured value of 50 cents. One of the differences between using bitcoin and using regular money online is that bitcoin can be used without having to link any sort of real-world identity to it. Bitcoin is literally a coin analog made out of digital bits. Bitcoin is a digital asset and payment system, and is—so far as we know—the most successful cryptocurrency ever created. The U.S. Securities and Exchange Commission (SEC) has been gone to significant lengths in an attempt to understand the crypto asset space. This effort is to be applauded. However, the SEC has failed to come to terms with one fundamental aspect of crypto assets and systems. Namely, properly constructed crypto systems do not involve “persons” or “entities” and do not represent a form of property. For this reason, they do not have any analogue in the traditional financial world, nor can they fall under financial regulation. In the traditional financial world, assets are a claim on a specific property. For example, a commodity, shares in a company or a debt owed. Crypto assets, however, are not a claim on anything. What is bitcoin a claim to? Or ether? Instead, crypto assets are a form of proof. They are cryptographic proof that a specific set of mathematical functions has been performed. They are proof that certain software instructions have been performed and of the algorithmic outputs of that software. And crucially, the mathematical functions are performed by nobody in particular, they are performed by the network as a whole. Property is “ownership determined by law.” Crypto assets are not property because they are not determined by law – they are determined by maths. — Edan Yago n22-18 Unlike traditional currencies, bitcoin(s) are "entirely virtual." There are no physical coins or even digital coins per se. The coins are implied in transactions that transfer value from sender to recipient. Users of bitcoin own keys that allow them to prove ownership of bitcoin in the bitcoin network. With these keys they can sign transactions to unlock the value and spend it by transferring it to a new owner. Keys are often stored in a digital wallet on each user’s computer or smartphone. Possession of the key that can sign a transaction is the only prerequisite to spending bitcoin, putting the control entirely in the hands of each user. Bitcoin users communicate with each other using the bitcoin protocol primarily via the internet, although other transport networks can also be used. Bitcoin is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. The system is peer-to-peer, and transactions take place between users directly, without an intermediary.8:4 These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. Nakamoto's development of Bitcoin in 2008has often been hailed as a radical development in money and currency, being the first example of a digital asset which simultaneously has no backing or intrinsic value and no centralized issuer or controller. However, another, arguably more important, part of the Bitcoin experiment is the underlying blockchain technology as a tool of distributed consensus, and attention is rapidly starting to shift to this other aspect of Bitcoin. Commonly cited alternative applications of blockchain technology include using on-blockchain digital assets to represent custom currencies and financial instruments (colored coins), the ownership of an underlying physical device (smart property), non-fungible assets such as domain names (Namecoin), as well as more complex applications involving having digital assets being directly controlled by a piece of code implementing arbitrary rules known as smart contracts[6 or even blockchain-based decentralized autonomous organizations (DAOs). * See Nick Szabo. Incidentallty, bitcoins may be referred to as Nicks of Time. Category:Economics Category:Currency